First, to begin with, it is quite remarkable that an owner, a lessee or an occupier of land or building pay an amount fitting of the value of the property as a requirement by the government. This is collected for strict purposes of enhancing the developments undertaken by the government for the benefit of the citizens.
It is the job of a property assessor to solely determine the worth of the property within the boundaries of the Taxation Act and its regulations. This is to ensure that all properties are assessed fairly and equally. The assessor tabulates the taxes using this data with which one is required to use as a reference to the payment of taxes required.
It is a civic responsibility to pay property taxes. It is this country that we wake up to every day. Our forefathers have struggled since time immemorial to build this great nation America. As stipulated by the US Constitution Art 1, section 2 It is required of every citizen to pay the property tax. The Internal Revenue Services (IRS) oversight this. That is a responsibility of a patriotic citizen.
The Main Source Of Revenue For The Local Government
Property taxes are of the local governments’ main source of revenue. The revenue is directed to the welfare of the community; this includes the construction of roads, the enhancement of educational facilities, recreational facilities and so on. This tax even directly affects the compound with issues such as garbage collection taken care of.
The Complexity Of Tax Preparations
Paying property taxes for an already paid off house is a chance for one to be able to counter complexity of tax preparation as compared to the taxpayers still paying their mortgages. This means that the processes in place for a paid-off house owner are reduced hence the process is much easier. One no longer needs to deal with an escrow account but directly with the government authority.
The escrow account allows a property owner include property tax, homeowners insurance, and other bills according to necessity. This is divided by 12 to get the required monthly payment where interest is included. Tabulation of monthly payments can be hectic since the escrow company keeps fluctuating the payments. There is no way of telling whether the escrow account will be cheaper than a paid off house in the course of say a year.
An escrow account also encounters interest loss. This is by using the calculations below:
1) Multiply the escrow account balance by 1/12 of the interest rate.
2) For states that require the lenders to pay interest on escrow balances, subtract from the rate you would earn if you had your own account.
The amount that previously went to mortgage interests can now be used for the enhancement of the community now that payments are greatly reduced. The government with the counsel of the data from the government assessor impute a tax that is reasonable to the property. The difference is that now ones write-offs are no longer a privilege.
Generated Investment Properties
If the property under one’s ownership is income generating then the state is entitled to taxation on the interest earned from the property. The internal revenue service charges tax for this interest. It should come as relief knowing that income generated through an investment property does not require FICA tax payment.
Tax Deed Sales
If the taxpayer forfeits and fails to pay the property taxes, then the chances are the internal revenue service sells the property and the purchaser consequently gets the deed to the property. This means that the tax deed sales seize to exist under in your name. The amount it is sold at is such that the property tax amount plus any other fees and interest charges are recovered.
It is easy to acquire a house under foreclosure since the property tax is only a small percentage of the worth of the house; fast track, it is so easy to lose a house over unpaid property taxes.
Tax Lien Certificate Sales
If the property tax payment is not up to date; the property risks having its tax lien sold with the purchaser. Thus having the right to collect the debt due to the unpaid property taxes. The purchaser may also decide to convert the certificate to a deed. The taxing authority through the procedures provided by law may also be in a position to sell the home since it is at its disposal.
At this stage, the only way to get the property back would be repurchasing it by paying the buyer the previously paid amount (which would be an equivalent of the property taxes owed). This is doable for a period of about a year depending on the different states. Other states also allow redemption even before the sale. The silver lining is that this can only be done with the help of an attorney.
It is possible in some states to have the amount of tax reduced based on factors such as age, disability, personal income, or even personal status. Payment of property taxes is a duty that every citizen has to uphold. If forfeited there are severe consequences that one may suffer given the tax authorities in place.
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